Consumer associations warn of risks of bank concentration

Barcelona, ​​May 12 (EFECOM). – A possible takeover of Banco Sabadell BBVA has prompted consumer associations to warn that banking market concentration is tending to lead to lower interest rates on savings products, higher fees and fewer branches.

The absence of a single European market for financial services, which allows free choice between the offers of organizations from other countries of the community, means that national mergers have an even more profound effect in the Spanish sphere, says the Organization of Consumers and Users (OCU). .).

“Banking is undergoing a process of significant reduction in the number of players in the market, which leads to more expensive loans as well as fees,” OCU spokesman Enrique García told EFE, who assures that similar consequences have already been observed in the past. concentration operations.

Reduced competition also reduces incentives to increase the return on savings. Rising interest rates between 2022 and 2023 hit mortgages and consumer loans quickly, but did not hit deposits at the same rate, which generate income for savers, Garcia said.

Veronica Rodríguez, representative of the Association of Financial Users (Asufin), speaks in a similar vein: “Greater banking concentration, in which competition is further reduced, will ensure that this will continue and not be corrected,” she explains. . to EFE.

If the proposal presented by BBVA to Sabadell shareholders is implemented, the resulting company will become a financial giant with almost one trillion euros in assets and a loan market share of about 22% and 23% of deposits.

The merger of both banks will create an initial workforce of 135,462 employees, of which 19,213 will be provided by Sabadell. In addition, the new division will have a network of 7,115 offices and 1,414 operational bank headquarters in Sant Cugat (Barcelona).

By establishing both businesses in a territory such as Catalonia, the merger of both would leave 84.7% of the offices in the hands of the three big banks.

According to the Generalitat, if BBVA takes control of Banco Sabadell, CaixaBank will consolidate 39% of branches in Catalonia; BBVA and Sabadell will add 34%, and Banco Santander another 12%.

Consumer associations say the possible cuts to redundant branches could deprive people at risk of financial exclusion of direct banking services.

“Our request to the government is focused on taking care of vulnerable consumers in allowing this operation,” Garcia says.

OCU data shows that 1.4 million people are at risk of financial exclusion in Spain, most of them living in small towns, and that 42% of citizens living in towns with fewer than 5,000 inhabitants have been affected by bank office closures. New mergers will worsen this situation, a representative of the organization emphasizes.

Banking sector sources have assured EFE that the takeover of BBVA by Sabadell will also have an impact on business lending.

These sources clarify that the addition of BBVA and Sabadell will have an impact, for example in terms of credit risk, since both banks have important business in the SME segment.

From Asufin, they clarify that the possible reduction of the least profitable offices, usually located in the most depopulated areas, will affect not only individual clients, but also small businesses and small and medium-sized companies, which may lose their reference banking point of contact. .

At the same time, the service portfolio will also undergo a reconfiguration, becoming more general and less specialized, thereby maintaining the association of financial services users. EFECOM

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